Why ACCC’s Rod Sims is concerned the grocery code could be damaging

THE top competition cop is concerned the proposed grocery industry code will unfairly force suppliers to supermarkets to pay for damaged products.

Australian Competition and Consumer Commission (ACCC) chairman Rod Sims

THE top competition cop is concerned the proposed grocery industry code will unfairly force suppliers to supermarkets to pay for damaged products.

Australian Competition and Consumer Commission chairman Rod Sims will today say it would be of “considerable assistance” to the sector if its code provided “clear rights and legally enforceable norms of conduct”.

“However, many of the protections of the proposed code are qualified and retailers and

suppliers are able to agree to ‘contract out’ of code provisions,” says a speech Mr Sims is due to deliver to an Australian Food and Grocery Council (AFGC) forum in Canberra today.

“This raises an issue of whether the code will address the problems which industry has

identified if norms of conduct in the code are able to be traded away, rather than always

enforceable.”

The provisions which could be contracted out of include payments for “wastage” — an industry term for products that are “unfit for sale” — as well as unilateral and retrospective variations to a grocery supply agreement.

The proposed code has been developed by Coles, Woolworths and the AFGC, which represents suppliers. The trio wants the Federal Government to “prescribe” the grocery code under the Competition and Consumer Act. The ACCC would then regulate the code. Its final form is still being shaped.

Mr Sims will foreshadow “further action” from its investigation into how supermarket chains treat suppliers. That investigation has already led it to take Coles to the Federal Court for “alleged unconscionable conduct”. The matter is still before the court.

Mr Sims will also say he supports the competition policy review’s draft recommendation for “cost-reflective” road pricing.

“Importantly, more effective road user charges can be offset by lower fuel taxes which

currently account for one quarter of fuel prices,” Mr Sims is due to say.